Qizhi Chen v Monash University

[2015] FWC 3888

[2015] FWC 3888

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Qizhi Chen
v
Monash University
(C2015/3897)

VICE PRESIDENT HATCHER SYDNEY, 11 JUNE 2015

Appeal against decision [[2015] FWC 2798] of Deputy President Gooley at Melbourne on 27 April 2015 in matter number U2014/16593 – application under rule 55(1) of the Fair Work Commission Rules 2013 for security for costs.

[1] Ms Qizhi Chen has lodged a notice of appeal in which she applies for permission to appeal and appeals a decision of Deputy President Gooley issued on 27 April 2015 1 (Decision) and an order issued pursuant to the Decision on 30 April 20152. The Decision and Order concerned an application by Monash University, the respondent to an unfair dismissal remedy application lodged by Ms Chen, for a costs order in its favour pursuant to s.400A of the Fair Work Act 2009 (FW Act). In the Decision, the Deputy President found that Ms Chen had acted unreasonably in failing to discontinue her unfair dismissal remedy application on 17 January 2015, and exercised her discretion to award costs to the University for the period 17 January 2015 to 23 January 2015 (when the unfair dismissal remedy application was discontinued). The Order required Ms Chen to pay the University $2,260 for costs within 14 days of the date of the Order (that is, by 14 May 2015).

[2] In her notice of appeal, Ms Chen sought a stay of the Decision and Order pending the hearing and determination of her appeal. On 10 June 2015 I issued a decision 3 (Stay Decision) rejecting the application for a stay on the basis that I was not satisfied that Ms Chen had an arguable case with some reasonable prospects of success for the grant of permission to appeal under s.400(1) of the FW Act.

[3] On 14 May 2015 the University made an application for an order for security for payment of costs to be made in its favour. Submissions made in support of the application which were sent to the Commission on 10 June 2015 identify the amount of the security sought as $7,500. This amount is made up of the following elements:

1. $1,500 for legal research, preparation of brief to counsel in respect of the security for costs application and defending Ms Chen’s stay application, appeal and application for costs.
2. $500 for perusal of correspondence from the Commission and documentation filed or sent by Ms Chen in relation to the matter.
3. $1,000 for drafting the application for security for costs, and other correspondence to Ms Chen and the Commission.
4. $500 for taking instructions from the University and conferring with counsel.
5. $1,000 for the solicitor instructing counsel at hearing.
6. $3,000 for counsel’s fees for drafting submissions, drafting further security for costs application, appearance at hearing and all other necessary preparation.

[4] The application is made pursuant to rule 55(1) of the Fair Work Commission Rules 2013. Rule 55(1) provides:

(1) A respondent or applicant in a matter before the Commission arising under Part 3-2 of the Act (unfair dismissal) may apply to the Commission for an order that a person provide security for the payment of costs in respect of the matter or part of the matter.

[5] The University contends that Ms Chen’s appeal is one arising under Part 3-2 of the FW Act because the decision the subject of the appeal was made under s.400A, which falls within Part 3-2 of the Act. I will assume, without deciding, that the appeal is a matter arising under Part 3-2 because it concerns a decision made under Part 3-2.

[6] The principles relevant to the determination of an application for security for costs were summarised by Asbury DP in Harris v Home Theatre Group t/a Home Theatre Group 4, which summary was quoted with approval by the Full Bench in Zornada v St John Ambulance Australia (Western Australia) Inc 5 In short, there is no absolute rule that controls the exercise of the discretion to order security for costs, and the outcome will depend on the circumstances of the case with the governing consideration being what is required by the justice of the matter. Matters relevant to the consideration will include the financial position of the party against whom the order is sought, the prospects of success and strength of the case of the party resisting the order, the prospects of a costs order being made even if the party seeking the order for security for costs is successful, whether a costs order will be satisfied if made, whether a party will be or will be likely to be absent from the jurisdiction when a decision is made and has no or few assets in the jurisdiction, whether the proceedings raise matters of general importance and whether the hearing of the proceedings is close at hand.

[7] In relation to appeals, Asbury DP said:

“[8] ... There is also a general rule that poverty should not be a bar to a person prosecuting a claim at first instance. On appeal, the question of security is to be determined differently on the basis that the appellant has had his or her day in court, and should not be given a ‘free hit’, particularly in circumstances where the costs of a proceeding below had not been paid by the appellant.”

[8] In Zornada the Full Bench added the following observations:

“[35] … We further note that costs orders in this jurisdiction are extraordinary, and security for costs orders even more so. This is because the Act reflects the longstanding principle that costs will not be awarded against parties in industrial proceedings, other than in exceptional circumstances. Costs are limited to circumstances where the proceedings have been commenced vexatiously, without reasonable cause, or in circumstances where it should have been reasonably apparent that the application had no reasonable prospect of success. It should be noted that a proceeding is not to be classed as being instituted without reasonable cause simply because it fails, but rather in circumstances where the applicant’s own version of the facts, it is clear that the proceeding must fail.

[36] Accordingly, the Commission should award security for costs only in the rarest of circumstances, once the Commission has balanced the merits of the application, the financial position of the parties, and what is just in the circumstances.”

[9] It may be noted at the outset that a number of matters favour the grant of the order sought by the University. As concluded in the Stay Decision, the assessment that may be made on the basis of the materials currently at hand, which include Ms Chen’s outline of submissions filed for the purpose of the hearing of her application for permission to appeal, is that the appeal lacks merit. In correspondence with the Commission, Ms Chen has indicated that she has left the jurisdiction, and she has no apparent intention of returning to Australia any time soon, including for the hearing of her application for permission to appeal. Further, I consider that there is a real possibility that, if the appeal proceeds and fails, a costs order may be sought and obtained under s.611(2)(b) of the FW Act against Ms Chen on the basis that it ought to have been reasonably apparent to her that her appeal had no reasonable prospects of success.

[10] The comments made in Harris relevant to appeals I do not consider to be pertinent here. Ms Chen was the respondent to the costs application which was the subject of the Decision and Order, so this is not a case of her already having had her day in court in relation to a claim lacking significant merit. Although it appears that Ms Chen has not paid the amount required by the Order, her appeal, which included an application for a stay, was lodged before the time specified for payment in the Order had expired, and that stay application has only just been determined by the Stay Decision. I will treat this as a neutral factor.

[11] Ultimately I consider there is one consideration which weighs decisively against the grant of an order for security for costs, namely that I am not currently satisfied at this point in time that Ms Chen’s appeal will require the University to incur legal costs of any significance. Ms Chen’s stay application was able to be determined without requiring the University to lodge any submissions or attend any hearing. Pursuant to the Commission’s new pilot procedures concerning appeals from unfair dismissal applications, Ms Chen’s appeal has been listed for hearing on the question of permission to appeal only at this stage. That hearing will occur on 18 June 2015, only a week away. Consistent with the new procedures, the University has not been required to file any written submissions on the merits of the appeal in advance of that hearing. If it wishes to apply under s.596 of the FW Act to be represented by lawyers at the hearing, it must by today file a one-page submission in support of that application. It is far from guaranteed that such an application will be granted. If it is, the attendance required at the hearing is only for a period of approximately one hour since under the new procedures parties will generally be confined in their oral submissions to one half hour each. These procedures are intended to reduce the costs to parties of most appeals from decisions in unfair dismissal matters, especially for respondents to unmeritorious appeals, and it is expected that this objective will be achieved in practice.

[12] Further, it is relevant that Ms Chen applied for the listing and directions for her appeal to be varied to allow the appeal to be determined “on the papers” without holding a hearing. Under s.607(1)(b), the University’s consent was required for that to occur. The University has declined to give that consent. While the University was of course entitled to take that course, had it had consented to the appeal being heard on the papers, the result may have been that the appeal could have been determined without the University being required to file any submissions or attend any hearing.

[13] The bulk of the $7,500 amount claimed as security for costs (that is, items 1, 3, 4, 5 and 6) are based on one or both of two propositions: first, that the University will be represented at the hearing by lawyers (including counsel) and, second, that the University is entitled to security for costs for the costs it has expended in making the security for costs application. As already explained, the first proposition is problematic given that the University has not yet been granted permission to be represented by lawyers at the hearing, and declined the opportunity to avoid the need for a hearing at all. In my view the second proposition is an entirely circular one, and in any event I do not consider it likely that any costs order the University might obtain if it succeeds in the appeal would include its costs in this security for costs application.

[14] The remaining costs are not of sufficient significance to justify, in the interests of justice, the making of a security for costs order. I decline to make such an order at this time. In the event that Ms Chen obtains permission to appeal, leave is granted to the University to renew its application - noting however that the grant of such permission would be likely to suggest a different view of the merits of the appeal than that expressed in the Stay Decision.

VICE PRESIDENT

 1   [2015] FWC 2798

 2   PR566656

 3   [2015] FWC 3871

 4   [2011] FWA 2910 at [7]-[12]

 5   [2013] FWCFB 8255 at [35]

Printed by authority of the Commonwealth Government Printer

<Price code A, PR568183>